Inquiry finds NHS funding promises ‘misleading’

The funding set aside for the National Health Service in the spending review is in reality less than would appear to be the case from official pronouncements, a report by the Commons Health Committee has concluded.

The government announced last year that the NHS would receive an additional £8.4 billion above inflation by 2020-21, to help fill the growing whole in finances. But MPs note that while previous spending reviews health spending as the whole of the Department of Health's budget, that for 2015 is defined in terms of NHS England's budget, which excludes various areas such as spending on public health, education and training.

"Excluding these aspects of spending - which are being cut over the spending review period - is misleading, as these organisations play a vital role in providing front line services to patients, reducing demand through prevention and in training the future workforce," the report argues, and claims that, using original definitions, and taking 2015-16 as the base year, total health spending will actually only rise by £4.5 billion in real terms by 2021.

"Whilst the NHS has been treated favourably compared to many other departments, the increase in health funding is less than was promised if assessed by the usual definitions," noted Committee chair Dr Sarah Wollaston. "Funding cuts to public health will make it more difficult to address the challenge set out by the Prime Minister to reduce health inequality," she added, and warned of a "false economy" that would create avoidable, additional costs in the future.

"We are concerned that the shift in resources, especially from public health, health education, transformation and capital budgets, will make it far more difficult to achieve the ambitions set out in the Forward View. In our view, the funding announced in the Spending Review does not meet the Government's commitment to fund the Five Year Forward View," the Committee stressed.

The report also warns of new challenges to the collective purse, most notably the rising deficits in NHS providers, and that current strategies to combat this - including pay restraints, imposing agency price caps and reducing capital spending - are not sustainable ways of securing efficiencies in the long term.

Also, the cash stream designed underpin service improvement in the future, the Sustainability and Transformation Fund, "is being used almost entirely to plug provider deficits, rather than to transform the health and social care system at scale and pace," it notes, and calls for the 'transformation' element to be protection to "allow the ambitions of the Five Year Forward View to be realised", including integration of health and social care services.

The Committee also said that, given the heavy drag on NHS resources, it will be reviewing whether the focus on seven-day services is delivering value for patients, particularly as there are concerns that it could displace measures which would be more cost effective.

"It is time for the Government and NHS England to set out how they will manage the shortfall in NHS and social care finances if the measures proposed by the Forward View fail to bridge the funding gap. If the funding is not increased, there needs to be an honest explanation of what that will mean for patient care and how that will be managed," the report concludes.

Commenting on the findings, Paul Briddock, director of policy at the Healthcare Financial Management Association, said: "Overall the situation has gone from bad to worse and there are growing concerns about the achievability of ambitions set out in the Five-year forward view. There is good work around the country to develop new models of care to transform service delivery but with significant deficits in the provider sector and concerns about the rate of recovery, it's important we have a plan B in place to deal with the emerging funding gaps."

NHS sustainability inquiryMeanwhile, the House of Lords Committee on the Long-term Sustainability of the NHS is now calling for submissions to its inquiry to identify what the NHS of the future may look like.

The inquiry comes as NHS commissioners and providers are racking up annual deficits of £1.85 billion, at a time when the health service is facing growing demand from an ageing population with increasingly complex long-term health needs.

"It seems that on an almost daily basis we hear stories of one NHS crisis or another but we have not yet had a robust long-term analysis of the challenges it faces," noted Lord Patel, who chairs the Committee. "The NHS is one of our most beloved institutions with principles that people value and admire but like any public service it must adapt. We need to find long term solutions".

The inquiry has been divided into five themes: resourcing issues; workforce; models of service delivery and integration; prevention and public engagement; and digitisation, big data and informatics.